Module: Project Management
Code: PMNM101

PART TWO: PROJECT COSTS AND SCHEDULES

Learning Outcomes
a) Estimate a Project time and cost
b)Use chart and network techniques to schedule a project:
- Draw a GANTT chart
- Construct an AON network (PERT)
- Calculate activity times
- Determine the critical path and time
- Determine the float (slack)
c) Analyse changes in project constraints and the cost of making
adjustments.

Estimate a Project Time and Cost
Time and cost are the two of the three major project constraints.
The three constraints or dimensions have serious effect on the
success of a project.
This section will explore different scheduling techniques used in
project management from small to complex projects.
It will further analyse the project resource requirements: project cost
and cashflow.

SCHEDULING
 After the WBS process, scheduling the work elements is the most
important step in planning as it becomes the basis for:
Allocating resources
Executing work
Tracking project performance
Finishing on time
 Schedules show the timing for work elements and when specific
events and project milestone should take place.

SCHEDULING Cont’d
Events and Milestones:
• Events represent the start or finish of something.
• Event signifies a moment in time, an instant when something happens.
In projects there are two kinds of events: Interface and milestone.
• An interface event is the completion of one task and simultaneous start of
one or more subsequent tasks.
• A milestone event signifies a major project occurrence such as completion
of a phase or several critical or difficult tasks, approval of something
important, or availability of crucial resources.
• It signifies progress, therefore it measures performance

Kinds of Schedules
There are two kinds of schedules: project schedule and task schedule
• A project schedule (or project master schedule) plans and reviews the entire
project.
• It shows the major project activities without much details about each.
• Top managers develop project master schedule.
• A task schedule shows the specific activities necessary to complete a work
package.
• A task schedule is created for people working on a specific task and enables
lower level managers or supervisors to focus on the task and not to be
distracted by other tasks with which they have no interactions. Task
schedules are prepared by functional managers or sub-contractors.
NB: Task and project schedules are displayed in many ways including Gantt
charts and project networks.

PROJECT SCHEDULE: TIME MANAGEMENT
The project needs to be completed on time. It then consists of five major
processes:
1. Activity definition: specify the activity to be accomplished
2. Activity sequencing: Identify dependencies among activities
3. Duration estimation: Estimate the time needed to complete each
activity
4. Schedule development: Analyse activities sequences and durations,
and resource availability to develop a realistic and achievable
schedule.
5. Schedule control: maintain the project schedule

PROJECT SCHEDULE: TIME MANAGEMENT Cont’d
Activity sequencing
An activity-on-node network may have four types of logical
relationships:
 Finish-to-start
 Finish-to-finish
 Start-to-start
 Start-to-finish
A project critical path is the network path with the longest duration. It
determines the shortest total duration of a project. Any delay on critical
path will delay the project completion time.

CHART AND DIAGRAM USED IN PROJECT SCHEDULING
Chart and diagram mostly used in project scheduling:
 Gantt chart: simplest to use and display activities plotted as bars or lines
on a timeline. It cannot show logical relationships between activities.
 PERT (programme evaluation and review techniques): complex
Determination of the critical path
 EF=ES+AD
 LS=LF-AD
 A slack is the time that an activity may delay without delaying the project’
s end date.
 Slack= LF-EF or LS-ES

GANTT CHARTS
The simplest and most commonly used scheduling technique is the
Gantt chart (or bar chart) developed by Henry Gantt.
It was easily adopted in industry and today it is used in a variety of
ways.
The Gantt chart consists of a horizontal scale divided into time units
(days, weeks, months, etc.)
and vertical schedule showing project work elements (task, activities,
or work packages).
The preparation of the Gantt chart comes after a WBS analysis and
identification of work packages or other tasks.

Gantt chart and Calendar
The following must be considered before presenting the Gantt
chart:
Workdays
Rest days
Holidays
Training
Number of calendars

Milestone Gantt Chart
Gantt Chart

Advantages and Disadvantage of Gantt Chart
Advantages:
• it is often maintained manually, and better for small project, but a burden
and disadvantage in large project.
• It requires a software for a large project in its creation and update:
assuming input data is accurate and updated, computer-generated Gantt
charts can be updated frequently to display progress.
Disadvantages:
• The Gantt chart does not necessary show the relationships among work
elements
• It does not reveal the effect of a work element falling behind schedule on
other work elements as certain work elements must be completed by a
specific date for the project to be completed on target.

Program Evaluation and Review Techniques:
Networks Diagrams
• Network methods show interdependencies and what happens to
the project when resources change or individual activities are
delayed.
• A network diagram shows a group of activities or tasks and their
logical relationships. e.g.: precedence relationship or dependency.
• It describes a project in terms of sequences of activities and events.
Two common methods for constructing network diagrams are:
activity-on-node (AON) also called precedence programming
method (PDM) and activity-on-arrow (AOA)

EXERCISE
Construct the activity-on-the-node project network diagrams for the project
defined below:
ACTIVITY PRECEDING (FROM)
ACTIVITY
SUCCEEDING (TO) ACTIVITY
A _ C,E
B _ D
C A D
D B,C F
E A,G F
F D,E _
G _ E
ESTIMATED DURATION
(WORK-DAYS)
3
5
3
10
8
14
7

Critical path
Network
CP=A+C+D+F
= 3+3+10+14

Critical path may change
Network: assume I is preceding by E and will take 16 to complete
CP=G+E+I
=7+8+16

EXERCISE CONT’D
• CRITCAL PATH
ACTIVITY DURATION
(WORK-DAYS)
EARLY
START
EARLY FINISH=
EARLY
START+DURATION
LATE START=
LATE FINISH-
DURATION
LATE
FINISH
SLACK= LATE
FINISH-EARLY
FINISH OR LATE
START-EARLY START
K 2 0 2 0 2 0
L 2 2 4 2 4 0
M 2 4 6 4 6 0
N 4 0 4 1 5 1
P 1 4 5 5 6 1

Build a network for this manufacturing project:
Calculate and comment on the critical path
ACTIVITY IMMEDIATE PREDECESSORS DURATION (Weeks)
A - 3
B - 4
C A,B 3
D A,B 5
E C,D 5
F C 4
G D,E 6
H F,G 3

Introduction to Project Resources
Resources include (information, human, physical and financial):
• Skilled workers
• Machinery
• Equipment
• Working capital
These resources dictate whether activities will be completed on
time or delayed.

Allocation of Resources
1. Identifying and assigning resources to activities so that the
project is undertaken using appropriate levels of resources and
within an acceptable duration.
2. Usage and availability of resources are the major problem areas
for managers.
3. The project resource schedule is important because it serves as
time baseline of the project.
4. Resource allocation, smoothing (don’t go beyond resource
requirement), levelling and scheduling are techniques used to
determine and manage appropriate levels of resources.’

Allocation of resources Cont’d
Two cases where the project schedule must accommodate
resources: resource levelling in time constrained and resource
constrained project.
• Resource levelling: there is enough resource to complete the
project on time, but the amount of resource needed fluctuates
drastically. The objective is to balance or level the resource
needed throughout the project.
• Resource constrained project: there is no enough resource to
do multiple activities at once in adjusting the schedule to
accommodate the constraint.